Time To Get Our Brass Back ?

[youngmafbog]

http://news.sky.com/story/1123048/lloyds-banking-group-back-in-half-year-profit

Now banks are leading the resurgence and making profits, Lloyds is now alos joining the charge.

Should we hang on for a higher share price or dump them out and risk a drop in the market?

[youngmafbog]

D'oh, done it again, the link:

http://news.sky.com/story/1123048/lloyds-banking-group-back-in-half-year-profit

[factor-fiction]

Robert Peston was talking about this on radio 4 news this lunchtime. He thinks that there is a good chance the government will announce, perhaps early next week, it will sell a tranche unless the price drops again in the next day or so.

[ToraToraTora]

I'd say leave it in, the only way is up at the moment!

[jake-the-peg]

Yes but there is the small issue of the cost of capital.

Leaving it in isn't free - if the Government is borrowing as say 5% 10 Billion in Lloyds costs us £500 million to leave it in for a year

[ToraToraTora]

well assuming they use the proceeds to repay debt jake, you are correct, but they'll probably just give it straight to the EU!

[Gromit]

Bit of deja vu, a Conservative Government selling TSB shares. The last time they squandered the money on paying people to be unemployed.

Not convinced now is the right time to sell, we will not yet get a good price. The FT says it is Osborne's 'Get out of jail card'. His mismanagement of the economy will be hidden if they get a windfall sum, so the temptation to sell too early and leave the country out of pocket is highly likely.

[LazyGun]

Personally, I think they should wait, although I had not given Jakes point about the cost of leaving it in much thought before.

Actually, the cynic in me figured the coalition would hold off selling the shares until closer to the next General Election, so the sale can be used ( assuming of course that they get a good price) as a political tool

[Gromit]

The tax payer put in £20billion.. How big a loss is Osborne prepared to accept to get his hands on pre election spending money? If we lost say £10billion he could offer the rich a tax cut in his 2015 manifesto...

[ToraToraTora]

The break even point is 73.1, he'll easily get that, if he hangs on they'll quickly go higher once the start declaing dividends. They could make a good profit if they do it right.

[Gromit]

T3, will we get our £20billion back? Somehow I doubt it.

[sir.prize]

Jan to June 2012 Lloyds/TSB lost £400+ million.

How did they manage to make a profit of £2.1 billion Jan to June this year?

[LazyGun]

I might be misremembering somewhat - but I think that at least some of the losses last year were due to the provision they had to make to cover misselling compensation etc. Add to that the job losses, increase in mortgages and a decrease in bad debt and that probably explains a large part of it.

[ToraToraTora]

why not Gromit? if they sell the shares for at least what they paid then we'll get the money back. I'm sorry if I'm missing something.

[ToraToraTora]

yes the losses were mainly for paying out for misselling PPI, that must be comming to an end now.

[Gromit]

Tora Tora Tora

I think I have worked out what was confusing me.

2008
// Lloyds TSB closed at 151.3p last night, below the 173.3p at which the government will buy shares and implying a loss of around £600m on the investment. //

2013
// Shares in Lloyds rose more than 6pc in early trading on Thursday, with the shares trading at 72.87p. At this price, the stock is about 10p above the state's minimum break-even price of 61.2p and close to the average buy in price at the time of the bank's bailiout of 73.6p. //

[ToraToraTora]

You, gromit, confused? I'm shocked! If they flog them now they'll get most of the money back but I'd hold on until they announce a dividend then they'll go over £1 pretty well instantly. Then there's the TSB flotation comming up, I'd say the Governement would do well to keep them for a bit.